The Government has announced a major new initiative aimed at helping disabled people and individuals living with long-term health conditions enter, remain in and progress through employment, with a new Pathways to Work Innovation Fund set to open for applications in September 2026.
The Fund has been described by ministers as a “call to action” for organisations across the private, public and voluntary sectors to bring forward ambitious and innovative ideas capable of transforming employment support across the United Kingdom.
With an estimated 2.8 million people currently out of work due to ill-health, the challenge facing policymakers is significant. The Keep Britain Working review estimates that economic inactivity linked to health conditions now costs the UK economy approximately £212 billion every year.
The Government hopes the new funding programme will encourage businesses, charities, technology companies and disabled people themselves to collaborate on new ways of supporting people into meaningful and sustainable employment.
The initiative forms part of a wider £3.5 billion investment package aimed at improving employment support services for disabled workers and workers with health conditions. Ministers say the funding will support more personalised assistance, including specialist one-to-one support delivered within local communities and better integration between health and employment services.
Work and Pensions Secretary Pat McFadden stated that personalised support had already demonstrated life-changing outcomes for many individuals and called upon employers, charities and disabled people to help reshape the future of employment support by bringing forward new ideas.
The Innovation Fund will be supported by an independent expert panel that includes Paralympian and member of the House of Lords, Tanni Grey-Thompson. The panel will help shape the design of the programme and advise ministers on which projects should receive funding.
Baroness Grey-Thompson said that access to work is vital not only for financial independence but also for individual wellbeing and wider social participation.
She noted that disabled people continue to demonstrate their ability to thrive in employment when barriers are removed and appropriate support is available. She also highlighted the need for support systems to evolve alongside changes in technology and the labour market.
Alongside the launch announcement, the Work and Pensions Secretary visited techUK to meet businesses developing technology solutions designed to improve workplace accessibility and employment outcomes.
The Department for Work and Pensions says it is increasingly embracing artificial intelligence and machine learning technologies to modernise public services and improve employment support, including the development of new tools designed to match individuals with suitable employment opportunities.
The announcement also sits alongside a wider package of welfare reforms currently being introduced by the Government, including:
- Changes to Universal Credit intended to reduce barriers to employment.
- A proposed Right to Try Work Guarantee designed to allow people to explore employment opportunities without fear of immediately losing benefits.
- Investment of £3.5 billion in specialist employment support.
- Increased face-to-face assessments for health-related benefits.
- Measures intended to reduce fraud and error across the benefits system.
Further recommendations are also expected later this year from former minister Alan Milburn’s review into youth economic inactivity, while the ongoing Timms Review continues examining the future of Personal Independence Payment (PIP).
Antony Walker, Deputy Chief Executive of techUK, welcomed the announcement and said many disabled people remain excluded from employment opportunities because of barriers rather than a lack of skills or ability.
He added that technology companies are already developing solutions that help people find employment, remain in work and progress in their careers, and suggested the Innovation Fund could accelerate the adoption of successful approaches across the country.
Applications to the Pathways to Work Innovation Fund will open in September 2026, with full guidance expected to be published by the Department for Work and Pensions in the coming months. Public sector bodies, charities, private businesses and voluntary organisations across the UK will all be eligible to apply.
What this means for UK workers
For disabled workers and those living with long-term health conditions, the success of this initiative will ultimately be judged not by the amount invested but by whether it delivers practical improvements in access to employment and support within the workplace.
Many workers continue to report challenges surrounding workplace adjustments, flexible working arrangements, access to occupational health support and employer understanding of long-term health conditions.
The Workers Union believes that employment support is most effective when it is personalised, practical and designed around the individual’s circumstances rather than a one-size-fits-all system. If the Innovation Fund succeeds in encouraging genuinely new approaches, it could provide opportunities for thousands of people who have previously felt excluded from the labour market.
The coming months will determine whether the programme can deliver the innovation and long-term change ministers hope to achieve.
